Peugeot debt cut to junk status

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Peugeot Citroen’s debt was cut to junk status by credit ratings agency Moody’s yesterday, after the French automaker announced a €1bn (£627m) share issue and an alliance with US peer General Motors. Moody's Investors Service lowered Peugeot's rating by one notch to Ba1, the highest so-called “speculative” grade with a negative outlook. The cost of implementing the alliance will hurt Peugeot’s earnings in the short term, the agency warned, and cooperation may not produce the savings expected later.